Inside Asian Gaming

INSIDE ASIAN GAMING | December 2010 12 Martket Outlook property—City of Dreams’ layout is often accused of being user- unfriendly—to the relevance of the entertainment, dining and other non-gaming offerings. Galaxy is currently Macau’s most VIP-reliant operator, deriving 88% of its table gaming revenue from VIP baccarat in November. This is not surprising given the small footprint of its flagship StarWorld property, necessitating a strategy focused on a relatively small numbers of customers (namely, VIPs). However, Galaxy has significant mass-market capacity in the pipeline, with industry analysts predicting an opening for its Galaxy Macau mega resort on Cotai by May or June 2011. Galaxy Macau is tipped to be the only major new Macau casino property to open next year, and pundits are speculating on whether it will be able to drawmainland Chinese and other Asian tourists in the same way as Sands China has managed to do with its Venetian Macao property—effectively a ‘must see’for the bulk of visiting Asian tourists frommainland China and, increasingly, India. The latest estimate for total investment in Galaxy Macau is HK$14.9 billion (US$1.9 billion). That’s a smaller outlay than was made for City of Dreams. Whether Galaxy Macau eventually offers a better rate of return on investment than City of Dreams may depend on whether Galaxy does a better job of anticipating what the mass- market visitors arriving in Macau truly want. City of Dreams unveiled its much-hyped HK$2 billion (US$200 million) ‘House of Dancing Water’ show in September, but the results in October and November suggest the water show has yet to provide a significant boost to the property’s mass market table gaming revenue. Venetian Macao casino Whether Galaxy Macau eventually offers a better rate of return on investment than City of Dreams may depend on whether Galaxy does a better job of anticipating what the mass-market visitors arriving in Macau truly want.